Older adults suffer heightened prevalence of insomnia compared to middle- aged groups and increasingly turn to hypnotic medication in defiance of escalating health hazards. Further, there have been relatively few trials of psychological treatments with older insomniacs, and these have yielded moderate results. The present clinical outcome study will attempt to improve therapeutic efficacy by tailoring psychological treatments to geriatric insomnia subgroups that are distinguished by either behavioral or biological deficits. From a behavioral perspective, normal, but unfavorable, aging effects on sleep promote. the over diagnosis of insomnia among older adults. Seniors uninformed as to their changing sleep requirements and motivated to preserve a middle-aged sleep pattern may desire an amount and quality of sleep (sleep goals) that exceed biological need. This need/goal disparity may give rise to frustrating awake time in bed, i.e., an insomnia pattern, but not daytime impairment, a consequence of inadequate sleep. Such individuals, termed "insomnoid," would not be expected to benefit from conventional insomnia treatments aimed at extending sleep, but rather present a better fit with an intervention known as sleep restriction, which focuses on correcting sleep schedule behavior. It consists of revising sleep goals and shortening time in bed to match sleep need. Alternatively, individuals fitting traditional conceptions of insomnia present a disturbed sleep pattern and fail to satisfy biological sleep need due to worrisome thoughts, physical restlessness, and the like. These individuals are prone to exhibit residual daytime impairment characterized by sleepiness, cognitive and emotional deficits, etc., and would likely profit from a method such as relaxation that could surmount biological barriers to sleep. Daytime impairment emerges as a key factor in determining if disordered sleep reflects "true" insomnia or inappropriate sleep goals, and it also may predict differential treatment responsivity. The proposed investigation will compare three psychological treatments, sleep restriction, passive relaxation, and placebo desensitization with 120 subjects representing two older adult insomnia subgroups, high or low in daytime impairment as determined by a self-report questionnaire. An interaction is predicted, whereby high impaired subjects are expected to respond best to relaxation therapy and low impaired subjects best to sleep restriction. Assessments of sleep and daytime functioning will be conducted at baseline, posttreatment, and 8-month follow-up to determine clinical outcome. Additional assessments will monitor design variables and will screen for sleep-active medications.